Over the past 6 months, the Alberta economy has been undergoing a correction due to the rapid price pressures on crude oil. Being a natural resource based economy, Alberta has become accustomed to the volatility which comes with the opportunity to develop our resources. Some companies have right-sized to the current operating environment which we are in.
I have spoken with a number of businesses lately in regards to their progress in their lean initiatives that they have taken. One of these companies was very proud in the decrease of expenses that they were enjoying through the lean initiatives. When I asked them how they were able to get such large cutbacks, they answered ‘We just cut our staff. Everyone is tightening their belts and working harder.’
In others words, the company used the terminology of being lean to decrease headcount but not improve their processes, the quality of their end product, or improve the customers’ experience with their product. When asked which tools they had used and how they came about the conclusion that the staff needed to be reduced, they stated that they spoke to their accountant.
The company didn’t complete a I/O Matrix or go through a 5 Whys conversation to help identify roadblocks in their progress, but used financial analysis in the name of being lean. Being an accountant, I don’t have an appreciation of the end product they developed. In the future, when employees are told that they are going to go through another lean activity, don’t expect employees to help along with their processes. They are just going to remember their co-workers who were dismissed due to a lean cause.
Lean is about developing a culture which fosters constant change and improvement in an organization. The goal of lean is to increase the engagement of staff and allow them to voice their frustrations and possible solutions to activities that they complete on a daily basis. Overall, these items help to increase your profitability.
Have you completed a lean activity? What steps did you take?
Have an awesome week.
Photo Credit: mjtmail (tiggy) from Flickr Creative Common
Kevin MacDonald is the CEO of L6S Business Consulting Inc. L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin holds his CMA accounting designation along with a Black Belt in Lean Six Sigma.
Kevin is active in the community by volunteering for different groups, his condo board and donates platelets at the Canadian Blood Services clinics on a bi-weekly basis.